Telkom benefits from Neotel delays

9 Mar 2007

Telkom South Africa has said that delays in the launch of the country’s second national operator Neotel are boosting its own chances of retaining market share. ‘The fact that the market has lagged on the competitive and regulatory fronts is giving us time to do more smart stuff on the retail front’, said Steven Hayward, managing executive at Telkom’s retail marketing division, according to a report from local news portal MyADSL. The incumbent now expects to lose around 10% of its market share over the next three years, at the lower end of the range of its initial forecasts of a 10% to 15% loss. Neotel was originally expecting to begin offering commercial services to residential consumers in the first few months of this year, but the firm now says its residential services will not be available until at least the middle of the year. It introduced limited business services towards the end of 2006.

Meanwhile, the lack of competition has persuaded Telkom to postpone planned cuts to its ADSL tariffs. South Africa is among the world’s most expensive markets for broadband internet access, but Telkom says it will not now slash tariffs nor will it be making expensive upgrades to networks to allow for increased transfer speeds. The firm is expecting to be offering 10Mbps services by 2011, a speed which is already available in many markets at a lower cost than Telkom charges for its current high-end 4Mbps offering.